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Sunday, May 29, 2016

THE 3 BASIC LAWS OF MONEY

having a photo opportunity with Sergey

Almost 7 years ago, I had a Russian friend named, Sergey, who poked me regarding a romance novel that I was reading one day. We were on our way to work and he asked me why I was reading it. I said I just like to read. So I read whatever I get my hands into. And then he told me, "You are young. Take advantage of your time and read this," and he showed me a book about stocks. My first reaction went, "Isn't that gambling?" And then he simply answered, "That's why I asked you to read it first."

I know I've shared this more than once, that there's no other greater investment than to educate yourself. Last year, I am thankful to have found out an interest in pursuing financial education. Now, I am aware of the importance of "how to" handle money. And that's what I aim to share today. I never knew about the 3 Basic Laws of Money until then.

I read a shortened version of George Clason's book, "The Richest Man in Babylon" and it was a story of how a lowly man had become rich and how he multiplied it further. From it, the 3 Laws were simply put this way:

The first law talked about SAVING.

The second law talked about INVESTING.

And the third law talked about RE-INVESTING.

In today's setting, many people who had been working in Hong Kong for more than a year don't realise that they are actually doing these three laws thru their MPF Fidelity Accounts already. By law, an employee, contractual or not, after having completed a year of employment here in Hong Kong, and is still expected to work thereafter, is required to open an MPF account and to contribute monthly afterwards the 12th month to their MPF's. This MPF (Mandatory Provident Fund) becomes compulsory amongst employees who are working more than a year in Hong Kong. But you can start as early as possible. The Mandatory Provident Fund forms an important role to your retirement planning. To ensure that your MPF funds are handled well, it's good to choose an MPF scheme provider that has a secure and proven investment management track record and extensive global investment experience.

My interest in the proper handling of money got ignited and I pursue getting informed about it. Before, I would always just go check out nonsense stuff in the internet. Right now, I receive newsletters from ColFinancial for my dividends from the stocks I own, The Rich Dad Company that pings me when there are free upcoming webinars and I am now a pathfinder for www.spearheadmission.com, a platform that aims to help people become successful by empowering them thru financial education. I know it's not that much but these sites lead me to researching deeply.

I aim to learn as much about each related topic as possible because I would like to claim and pass the abundance in God's blessings bestowed to me everyday. That sounds corny, right? It's undeniable that personal gains are present but in addition, I would want to help others, most especially, those who are helping themselves while I, myself, am learning. To make that purpose short, I want to be rich. And in helping others, I "need" to be rich. This is ambitious in all its actuality but imagine a financially educated world. 'Nuf said!

Making good use of such investment, the knowledge earned from self help, is an achievement for me. Moreover, this education would be at its utmost potential if it is shared. Once it's shared, it may even earn more clarification from other people, that means further learning for me. I am aware that learning from other people is inevitable. I embrace this moment.

The topic about saving is almost "always" taboo to many people. They consider it too personal to be talked about. Some take it offensive even. But you would know those who are truly rich, they don't mind talking about this subject. In fact, they are open to views, opinions and discussion about money. Because for them, there's opportunity everywhere and in everything. They would even be willing to help you out if they sense potential in you.

The thing is, upon getting hold of empowering books in becoming rich, I've learned to create a team in my mind for a moral boost and a push at challenging times. I've learned that, when a person is actually blunt enough to tell you to save up, include that in your team. When there are people who aid you in opening yourself to embracing "good" habits that will lead you to having more "savings", put that in your team. In addition, having a trusted financial adviser eases the tension between your limited knowledge and the drive to pursue your financial goals, put one in your team. Having a professional advice is another option to be considered if you want to keep your financial standing discreet. You want to manage your loans and not be judged by it so having a financial adviser is one of the most sufficient moves for that. And last but not the least, the people who are actually inclined to doing the same thing, "saving"? Surround yourself with such if you aim to be rich. If you are saving up, and you are surrounded with one day millionaires, I don't know how you will survive.

Going back to the MPF. Here in Hong Kong, Fidelity is a partner of the Hong Kong government. They see to it that every Hong Kong resident has something set aside for their retirement. It's such a great law to impose as this takes care of the Hong Kong residents' welfare regardless of how long they would want to stay. And as for a general overview, this makes the country's reserves kept and are put in to work for the entire country. What does that mean?

People trust the investment schemes so they will be more than willing to fund for their retirement. This act alone saves a country from being under debts, saves it from a lot of crimes and gives it a sense of stability with its finances (gross national product). People have savings and at the same time, they have money to spend. This balance is necessary for a country's economy for cash-flow to be generated and spent. The laws of demand and supply are in balance. The producers earn and the customers are satisfied. Hoarding is minimised, small businesses are not crippled and most importantly, nobody becomes homeless or hungry upon reaching retiring age.

The beauty of it being compulsory is that I am saving (whether I like to or not) and it is being invested. The investment part can be diversified by the account holder himself/herself. Fidelity had assigned the account holder eligible to do so based on how they manage risks. It is lenient in a way in letting the account holder manage the percentages anytime. But as far as withdrawing the funds go, denouncing residency to the country needs to be done before they'd allow processing of these funds getting transferred to you. If you decide to come back to Hong Kong for another gig and then you work for another year and had to open an MPF account once again, then you can only withdraw those funds when you reach the retiring age of 65. But with its main purpose, why would you withdraw it if you need to leave the country when that was supposed to be for your own retirement? Why not just let it compound?

I am writing this post for those who are currently holding an MPF account. You are already doing the 3 Basic Laws of Money. It wouldn't hurt if you would put time in mastering the percentage allocation based on the risks you are ready to consider in investing your retirement funds. As of the present, the allocation depends on different indexes of banks, bonds, stocks and elements (gold, silver). Sergey had a point after all. It's not bad to learn about stocks as the second and third law may benefit from it.

*In 2010, changes had happened at work. Jugglers were changed for diabolo performers to welcome a different vibe. One time, my husband was watching one of my shows when he spotted an oddly looking fella, with long hair, long beard, in shades that was watching the show in the happiest place on earth... When he had seen him, the man had put down his shades and smiled, it was Sergey.